Company behind The Pink Flamingo, with $3.7m in debts, sold business for zero payment

A famed Gold Coast cabaret club company’s founders have broken their silence on a $3.7m voluntary liquidation, free sale to a related entity and how the club keeps trading. FULL STORY

Debt-ridden Gold Coast cabaret club Pink Flamingo’s founders say its fire sale just before voluntary liquidation was the “only way to ensure employees were taken care of”.

The latest liquidator’s report reveals the high-profile venue’s owners gave it to a related company – free – shortly before liquidation - but in an exclusive statement the founders maintain it was done with “integrity”.

Pink Flamingo founders Tony Rigas and Sue Porrett - opening up on the financial calamity for the first time - “stand by” the sale integrity, call it the “only way to ensure our employees were taken care of” and urge light be shed on small business “systemic issues” not “stigmatising these painful decisions”.

Pink Flamingo operator Project 88 TPF was put in voluntary liquidation with $3.7 million debt on July 29. That company - started five years ago before Covid decimated hospitality - is directed by cabaret founders Ms Porrett and Mr Rigas, who has been involved with seven liquidations in his colourful night-life career.

ASIC records show new company, KSAJ Group was created on July 11 with Louise Huxham – wife of Mr Rigas and a senior club manager – its sole director.

The cabaret now trades by the new company, continuing shows at its distrinct pink Broadbeach venue.

The pair’s joint statement says the sale to KSAJ was “carefully considered” and to save jobs.

“We stand by the integrity of the sale process to KSAJ Group. This was the only way to ensure our employees were taken care of. Like 1000s of small and medium enterprises (SMEs) the choice to liquidate or be made insolvent is a real issue facing real businesses on the Gold Coast every day.

“The option is out there to voluntarily liquidate, so we took that. Not an easy decision but one we deemed, as necessary.”

Pink Flamingo founders Tony Rigas and Sue Porrett. Picture: Jerad Williams

Louise Huxham and husband Tony Rigas. Photo: Celeste Humphrey

A report filed with ASIC from liquidator Jason Bettles of Worrells said Project 88 owed $3.7 million, including almost $2 million in tax and $370,000 in employee entitlements.

His investigation found possible unfair preference payments, insolvent trading and uncommercial transactions and the company may have been insolvent since June 30, 2022 – “if not earlier”.

In response, the pair said: “Project 88 TPF Pty Ltd always aimed to operate in full accordance with legal and ethical business practices. How is it possible to make unfair or preferential payments, at that stage we were doing everything we could to be fair to everyone - employees, creditors and ATO.

“On allegations of Insolvency since June 30, 2022: We were committed to monitoring the financial health of Project 88 TPF Pty Ltd and took measures to address any challenges. As an SMEs we found ourselves under financial pressures many which are not anticipated: persistent inflation, rising interest rates, cost of living and a relentless drive from the ATO to collect outstanding tax debts, sometimes at the expense of viability...a real daily situation we faced like many local Gold Coast SMEs.

“Mounting pressure to provide service and products to a high standard is very costly and one which we tried to maintain so the consumer would receive a high-quality experience and production every time they purchased a ticket,” their statement said. “In recent months, the construction and hospitality sectors have been notably affected, with over 6600 companies entering administration in six months.

“More than 1700 businesses went into insolvency in September 2024, a 78 per cent year-over-year increase. This surge reflects the broader financial strain on SMEs, largely driven by high interest rates, inflation, cost of living and aggressive tax debt collection.

“​We are sad and sorry we had to make this decision. And apologise to everyone affected. No one, including us, enters business expecting to fail or to let down employees, customers, or community. For so many of us, running a SMEs is about creating opportunities, supporting local economies, and building something meaningful.

“The recent wave of liquidations just goes to show many have been forced into doing so. Countless hard-working, decent people make the tough, often embarrassing decisions, all to salvage what they can to protect their people and community.

“If you are to write another article about us, perhaps and respectfully (we) ask you could shed light on these systemic issues rather than individual cases, it would not only honour the dedication of thousands of struggling business owners but also help spark a much-needed conversation on how we can better support SMEs. These businesses are the lifeblood of our communities, and with a more empathetic narrative, we can work toward solutions instead of further stigmatizing these painful decisions.”

The liquidator’s report said bank statement reviews and accounting records found payments to four related entitles of $497,070 in 12 months warranting further investigation.

Mr Bettles’ report said cabaret business was not marketed for sale and the new company never paid a proposed $2665 purchase price for it, with the director telling the liquidator an “adjustment” had been made for $390,140 in employee entitlements.

A Pink Flamingo live show in full swing.

The report said further investigation was needed to verify the value of the business transferred; added that the entitlements of transferring employees had been paid; and the company did not own any other equipment.

“Unfortunately, there are currently limited funds in the liquidation to meet these costs and consequently we have not pursued the matter,” it said.

“In the absence of further recoveries and/or funding from creditors to continue the investigations noted, we expect this to be our last major report to creditors and to have completed this liquidation within six months.”

Directors blamed the company failure on pandemic effects, Christmas 2023 storms and “failed attempts” at Adelaide shows, the report said.

Furniture and fittings from the cabaret popped up for sale online a week after the liquidation began.

The company found itself in a flap last year when ordered to pay $30,000 to two former staff in an unfair dismissal case.